Greenhouse Gas – Environmental Law & Policy Monitorhttps://www.environmentallawandpolicy.com
Analysis and commentary on developments in environmental and natural resources lawThu, 14 Mar 2019 13:35:40 +0000en-UShourly1https://wordpress.org/?v=4.9.10https://environmentallawandpolicyredesign.lexblogplatform.com/wp-content/uploads/sites/452/2017/08/cropped-cropped-favicon-1-32x32.pngGreenhouse Gas – Environmental Law & Policy Monitorhttps://www.environmentallawandpolicy.com
3232EPA Resets Public Hearing Date & Comment Deadline on Proposed Revisions to EGU CO2 Ruleshttps://www.environmentallawandpolicy.com/2019/01/epa-resets-public-hearing-date-comment-deadline-proposed-revisions-egu-co2-rules/
Thu, 31 Jan 2019 21:38:41 +0000https://www.environmentallawandpolicy.com/?p=4118Continue Reading…]]>EPA has reset the public hearing date on its proposed revisions to the New Source Performance Standards governing CO2 emissions from new, modified and reconstructed Electric Generating Units (EGUs). The hearing, originally scheduled for January 8th and then postponed until January 30th, is now scheduled for February 14th in Washington, D.C. Under the Clean Air Act, EPA is required to keep the record open for 30 days after the public hearing. Therefore, EPA is also extending the deadline for written comments from February 19th to March 18th. The announcement has been posted on EPA’s website and will also be published in the Federal Register.
]]>EPA Issues Two Controversial Proposals for Utilities That Will Have No Effect. Why?https://www.environmentallawandpolicy.com/2019/01/epa-issues-two-controversial-proposals-utilities-will-no-effect/
Wed, 16 Jan 2019 15:50:08 +0000https://www.environmentallawandpolicy.com/?p=4110Continue Reading…]]>In the last month of 2018, EPA released two proposals that it claims will have no immediate effect—revised CO2 standards for new coal-fired power plants that EPA does not expect anyone to build, and a determination that it is not “appropriate and necessary” to have a mercury rule that it nevertheless plans to keep on the books. The question many may be asking is why EPA would issue two highly controversial rules if they won’t have any practical effect? The answer may lie in the precedent they will set.

The first proposal, released December 6th, includes a revision to the CO2 performance standard for new coal-fired power plants that EPA set in 2015 based on partial carbon capture and sequestration (CCS) technology. EPA now proposes to determine that CCS is too costly and not sufficiently available to support a standard. Instead, EPA proposes to find that an efficient steam cycle is the “best system of emission reduction” for new coal plants, technology that maximizes the amount of electricity generated so that fuel can be used most efficiently, thus releasing fewer emissions for the same amount of electricity produced.

Recognizing that no new coal plants are planned in the near future, EPA’s impact analysis for the rule predicts that the rule will result in no costs and no benefits. However, it sets a precedent for how standards should be set under a provision of the Clean Air Act—Section 111—the key Clean Air Act program used by the Obama Administration to address climate change. Specifically, the proposal confirms that a standard should be based on a measure that is cost-effective and actually available to an entire industry, not just a measure that has depended heavily on government funding and worked only in a few isolated and unique circumstances.

EPA’s second proposal, released after the government shutdown but while the agency was operating on reserves, could have even greater implications, despite its lack of immediate impacts. The proposal involves EPA’s “Mercury and Air Toxics Standards” (MATS), adopted in 2012 to address the emission of hazardous air pollutants from coal- and oil-fired power plants. The Clean Air Act only directs EPA to regulate those emissions if EPA first finds that such regulation is “appropriate and necessary.” The Obama Administration made that finding (like the Clinton Administration before it), but in doing so decided to ignore how costly the regulations might be.

Now, under the Trump Administration, and in the wake of a Supreme Court decision heavily critical of EPA’s decision to ignore costs when adopting MATS, EPA has proposed to determine that regulating hazardous air emissions from power plants is not “appropriate and necessary” (like the Bush Administration before it). At the core of the proposal is the question of whether, and more importantly how, to consider “co-benefits”—benefits that are not the direct target of a proposed regulation but projected to occur as a side effect of the rule.

Under the Obama Administration, EPA touted billions in “co-benefits” from MATS, primarily reductions in particulate matter, even though many other programs already regulate those emissions. EPA’s new MATS proposal does not entirely ignore potential co-benefits, but recognizes that they should not carry “equal weight.” And, since the benefits directly targeted under MATS pale in comparison to costs (only $1 of benefit for at least $1,200 spent), EPA proposes to determine that no amount of co-benefits would be enough to overshadow that disparity. While EPA is proposing to leave MATS in place due to a provision of the Clean Air Act that imposes strict requirements on fully rescinding a standard, EPA’s new approach to evaluating co-benefits could set a significant precedent for future rulemaking actions.

The issues raised in these two late 2018 proposals will surely draw a raft of comments from interested stakeholders in the coming months, despite their lack of any immediate real-world impacts, due to the important precedents they could set.

]]>EPA Proposes Revisions to Obama Administration CO2 Standards for New, Reconstructed & Modified EGUshttps://www.environmentallawandpolicy.com/2018/12/epa-proposes-revisions-obama-administration-co2-standards-new-reconstructed-modified-egus/
Thu, 06 Dec 2018 22:15:31 +0000https://www.environmentallawandpolicy.com/?p=4075Continue Reading…]]>This afternoon, EPA announced proposed revisions to performance standards governing CO2 emissions from new, reconstructed and modified coal-fired electric generating units. The proposal would drop carbon capture and storage (CCS) as the best system of emission reduction (BSER) for new units in favor of efficient supercritical steam design for large units and subcritical design for smaller units, both in combination with best operating practices. EPA proposes to increase the corresponding performance standards consistent with the change in the BSER. Given the change in new source standards, EPA is also proposing conforming revisions to the standards for modified and reconstructed units and will add a proposed new standard for new and reconstructed units that burn coal refuse.

Unit-specific standards based on the unit’s best historical annual CO2 emission rate but no lower than 1,800 lb CO2/MWh gross for large units and 2,000 for smaller units

Same unit-specific approach but conforming the lower limit to the new source standards: 1,900 for large units, 2,000 for smaller units, and 2,200 for coal-refuse-fired units

1 Large units are defined as those having a base load rating of greater than 2000 MMBtu/hour.

2 Smaller units are defined as those having a base load rating of 2000 MMBtu/hour or less.

In addition to these changes, EPA is soliciting comment on the proper interpretation of the regulatory language providing the predicate for the regulations – the cause or contribute determination. Under Section 111 of the Act, before EPA can regulate, it must find that emissions from the source category “cause or contribute significantly to air pollution which may reasonably be anticipated to endanger public health or welfare.” EPA requests input on “the proper interpretation of this phrase, the agency’s historic approach to this requirement, and whether this requirement should apply differently in the context of greenhouse gases than for traditional pollutants.”

While EPA is not proposing revisions to the CO2 performance standards for natural gas fired units (simple cycle combustion turbines and combined cycle units), it does request comments on the current standard for new simple cycle aero-derivative turbines, including those used as back-up generation for wind and solar generation. Based on the feedback, EPA notes it might undertake separate action in the future on those standards.

This proposal responds to the Trump Administration’s Executive Order on Promoting Energy Independence and Economic Growth, which directed EPA and other agencies, to review existing regulations and revise or rescind “those that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law.”

Comments on the proposed revisions will be due 60 days from the date of publication in the Federal Register. EPA’s proposal and supporting documentation are available here on EPA’s website.

]]>Let the Comments Begin!—EPA Publishes Clean Power Plan Replacement Named “ACE”https://www.environmentallawandpolicy.com/2018/08/let-comments-begin-epa-publishes-clean-power-plan-replacement-named-ace/
Fri, 31 Aug 2018 20:24:11 +0000https://www.environmentallawandpolicy.com/?p=4056Continue Reading…]]>The comment period has now begun on EPA’s proposal for replacing the Clean Power Plan, named the “Affordable Clean Energy”—or “ACE”—rule. The rule was published in the Federal Register on August 31. And there is plenty to keep commenters busy over the next 60 days, given that EPA expressly identified 75 distinct requests for comment, not counting potential sub-issues and issues that EPA did not count. Comments are due by October 30th. Here are the top 10 key aspects of the rule that are likely to be the subject of the most fervent comments:

Section 111(d) Authority. As previously set forth in its proposed repeal of the Clean Power Plan, EPA has decided to return to its historical interpretation of Section 111(d) of the Clean Air Act—that it only authorizes EPA to establish the best system of emission reduction based on measures that can be employed within the fenceline of a source subject to the rule. Conversely, EPA makes clear that its historical reading of Section 111(d) precludes the use of “generation-shifting,” “reduced utilization,” or “redefining the source” as part of a Section 111(d) emission guideline, all of which were relied upon heavily under the Clean Power Plan. In the ACE proposal, EPA also characterizes its authority as merely providing “information” to states, that then have the authority to establish the enforceable, pound per megawatt hour “performance standards” on a unit-by-unit or source-category basis. EPA also leaves to the states to determine the compliance deadlines associated with those performance standards.

The Best System of Emission Reduction (BSER). EPA has determined that the best system for reducing greenhouse gas emission reductions from existing power plants (consistent with its reading of Section 111(d)) is to improve the efficiency of those power plants. Specifically, EPA listed six equipment upgrades and a seventh catch-all for improved operating practices that could be used to improve the efficiency with which power plants convert fuel into electricity. EPA expressly rejected carbon capture and sequestration as insufficiently demonstrated and co-firing with gas or biomass as insufficiently available and unnecessarily costly.

Affected Sources Subject to the Rule. ACE, as proposed, would apply only to coal-fired power plants, not gas-fired plants (unlike the Clean Power Plan, which applied to both). EPA’s basis for excluding gas-fired units is that it does not have enough information to establish a similar efficiency-based emission guideline for them. However, ACE is likely to set a precedent that could be important if EPA later decides that a similar program might be appropriate for gas generators after all. Exclusion from ACE might also mean that gas-fired plants will be unable to take advantage of EPA’s New Source Review reforms, summarized below.

No Presumptive Limits or Cumulative Targets: Unlike the Clean Power Plan, which focused on national and interconnection-level emission reduction targets to establish mandatory emission budgets for each state, ACE is not based on a cumulative emission reduction target, nor does it provide any presumptive limits or a prescriptive methodology for states to follow in setting performance standards. That approach provides states maximum flexibility and authority, but it may also lead to significant variability from state-to-state, as plans are developed and submitted to EPA for approval. EPA did provide a range of expected efficiency improvement levels for each one of the seven measures proposed, which states must consider, but exactly how states are expected to incorporate those ranges into the process of establishing standards of performance remains unclear.

Some Averaging, But No Trading: In describing the requirements for states, EPA made clear that averaging between affected units within a single facility will be allowed, but averaging or trading of emission reductions between facilities will be out of bounds. This aspect of the rule is likely to be trouble to states that have already sought to reduce greenhouse gas emissions via a trading program, such as the states participating in the Regional Greenhouse Gas Initiative.

Cost Implications: ACE expressly allows states to decide which measures are cost-effective, and therefore a valid basis for establishing a performance standard, and which measures might be too costly. As noted above, that evaluation can be case-by-case, so states will need to conduct a detailed assessment of each covered facility’s economic characteristics. EPA has also indicated a preference for including in that analysis the costs associated with any additional permitting or control requirements that could be triggered by the measures required—something EPA has not typically considered in the past.

New Source Review (NSR) Reform: EPA has resurrected a 2007 proposal for NSR reform that would add to the current NSR permitting applicability test a preliminary hourly emissions check. In short, if maximum hourly emissions are not expected to increase, NSR will not apply. The concept could be highly beneficial in simplifying and clarifying the controversial NSR program, and the hourly test squares nicely with the new 1-hour national ambient air quality standards. However, the exact form of EPA’s proposed preliminary hourly test leaves much to be desired, in that it relies on either a single highest hour or a flawed statistical analysis that must be compared to every single hour of emissions in the future. It also fails to implement the statutory requirement for evaluating only those emissions increases caused by a project.

State Plan Deadlines: EPA has proposed to significantly extend the deadline for state plans and for EPA action to approve those plans or issue federal plans for states that failed to submit an approvable one. This timeline will give states much more time to work with EPA and make sure their plan is approvable, but it also means that the deadline for approving plans will not arrive until the next presidential administration.

Adopting Standards Less (or More) Stringent than Guidelines: EPA’s ACE proposal confirms that a state’s standards of performance may be less stringent than the “information” comprising EPA’s emission guidelines. However, for a less-stringent state plan to be approvable, states must demonstrate the reasonableness of their decisions. How much or little deference EPA will pay to the state’s demonstrations will be, as noted above, up to the next presidential administration.

Rule Benefits and Costs: In evaluating the potential impacts of its proposal—its costs and benefits—EPA compared its ACE proposal to two baselines, one with the Clean Power Plan in place, and one without it, which reflects the current state of the law in light of the Supreme Court’s stay of the Clean Power Plan. EPA also relied on the social cost of carbon (but only domestic benefits) and co-benefits of particulate matter reductions (but noting that it has low confidence in the vast majority of the health benefits calculated). All told, the rule predictably provides fewer benefits and imposes lower costs than the Clean Power Plan, but greater benefits and costs than doing nothing.

]]>Environmental Protection Agency Releases Clean Power Plan Replacementhttps://www.environmentallawandpolicy.com/2018/08/environmental-protection-agency-releases-clean-power-plan-replacement/
Tue, 21 Aug 2018 17:15:29 +0000https://www.environmentallawandpolicy.com/?p=4053Continue Reading…]]>This morning, the Environmental Protection Agency (EPA) released its proposed replacement for the Clean Power Plan (CPP) titled the “Affordable Clean Energy Rule,” which would regulate greenhouse gas emissions at existing coal-fired power plants. The proposed rule gives discretion to states for determining the greenhouse gas performance standards achievable for existing coal-fired power plants within their state. Specifically, the proposed rule would require states to evaluate a menu of heat rate improvement options and, taking into account the unit’s remaining useful life and other factors, determine the lb/MWh CO2 emission rate achievable at each affected unit. While the rule proposes to allow for emissions averaging among affected units at an individual source, it does not provide for broader averaging or emissions trading. To facilitate the heat rate improvement projects, EPA also has proposed an option for states to adopt a new emissions test under the New Source Review program for EGUs that is based on both hourly and annual emissions.

]]>California Extends Greenhouse Gas Cap-and-Trade Program Through 2030https://www.environmentallawandpolicy.com/2017/07/california-extends-greenhouse-gas-cap-trade-program-2030/
Fri, 28 Jul 2017 12:12:33 +0000http://www.environmentallawandpolicy.com/?p=3696Continue Reading…]]>On July 25, California Governor Jerry Brown signed into law Assembly Bill 398, an extension of California’s greenhouse gas (GHG) cap-and-trade program through 2030. Eight days after being introduced, AB 398 passed the California Legislature with a two-thirds majority vote of 55-22 in the Assembly and 28-12 in the Senate. AB 398 implements California’s goal of reducing GHG emissions to 40 percent below 1990 levels by 2030, which was codified in SB 32, a bill signed by Governor Brown last year.

AB 398 extends California’s existing cap-and-trade program, which was passed in 2006, in which the California Legislature committed to cutting the state’s GHG emissions to 1990 levels by 2020, a 30 percent reduction from 2006 levels. AB 398 includes several important provisions that were key to obtaining bipartisan support, including directing the California Air Resources Board (“CARB”) to establish allowance price ceilings and cost containment measures, prohibiting local air districts from implementing CO2 reduction rules for stationary sources that are subject to the cap-and-trade program, and adding sales tax exemptions for certain electric generation, storage, and distributed resources.

Under the 2006 program, CARB is charged with creating and implementing a market-based GHG cap-and-trade program. The program applies to carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and other fluorinated greenhouse gases, including nitrogen trifluoride (NF3). The requirements apply to covered sources with annual emissions equal to or more than 25,000 metric tons GHG, as measured in CO2 equivalent. Covered sources include fuel production facilities, electricity generating facilities, and suppliers of natural gas, among others.

In conjunction with AB 398’s passage, Assembly Bill 617 also passed the California Legislature with a two-third majority (50-24 in the Assembly and 27-13 in the Senate). AB 617 responds to environmental groups’ criticisms that the cap-and-trade program has not done enough to address local and disadvantaged community concerns. As a result, AB 617 requires CARB to address local environmental concerns by establishing new reporting and enhanced monitoring programs for criteria pollutants and developing criteria-pollutant emissions reductions plans for disadvantaged communities in coordination with local air districts. Significant questions remain as to how CARB will implement these new requirements and it will be important for the regulated community to closely track the agency’s progress in developing both the monitoring and reporting programs as well as the emission reduction plans.

]]>California’s High Court Upholds GHG Allowance Auction Programhttps://www.environmentallawandpolicy.com/2017/07/californias-high-court-upholds-ghg-allowance-auction-program/
Thu, 06 Jul 2017 17:52:04 +0000http://www.environmentallawandpolicy.com/?p=3668Continue Reading…]]>California’s Supreme Court recently upheld the State’s greenhouse gas (GHG) cap-and-trade auction program. In a June 28, 2017 order, the Court denied petitions to review a lower court’s ruling that affirmed the program’s legality. Filed by a coalition of industry groups, including the California Chamber, the petitions had alleged that the cap-and-trade program constitutes an illegal tax under Proposition 13 because the law authorizing it, AB 32, was not passed by a two-thirds vote.

While the Supreme Court’s ruling is a win for the State and the program’s supporters, some believe the program should be modified to ensure deeper GHG reductions. The cap-and-trade program—whose authorization expires in 2020—has been the subject of a spate of recent legislative proposals in the California State Legislature, including one that would overhaul the program by implementing a stricter “cap-and-dividend” program and another that would limit the use of GHG offset credits.

]]>U.S. to Withdraw from Paris Climate Dealhttps://www.environmentallawandpolicy.com/2017/06/u-s-withdraw-paris-climate-deal/
Thu, 01 Jun 2017 22:54:12 +0000http://www.environmentallawandpolicy.com/?p=3634Continue Reading…]]>In the Rose Garden of the White House, President Trump fulfilled a key campaign promise today by confirming that the United States will begin withdrawing from the Paris Climate Change Agreement (“Agreement”). President Trump cited the Agreement’s potential financial and economic burdens as a key reason for the withdrawal.

The Agreement, a key component of the Obama Administration’s climate change agenda, was negotiated in December 2015, and signed by the United States in April 2016. Participating countries agreed to make efforts at keeping average global temperature increases below 2 degrees Celsius above preindustrial levels. President Obama pledged that the United States would cut its carbon emissions by 26% to 28% from 2005 levels by 2030, and provide significant financial contributions to developing countries.

The Agreement was never submitted to the Senate for formal ratification as a Treaty of the United States, suggesting that the country’s commitments were not legally binding.

At today’s press conference, President Trump indicated that he would follow the withdrawal process specified in the Agreement, which could take nearly four years. However, President Trump signaled that he would attempt to renegotiate the United States’ participation in the current Agreement or develop an entirely new agreement that would be more favorable to the United States.

]]>9th Circuit Upholds EPA’s Refusal to Require Solar Panels as Part of BACT Analysis for Biomass Facilityhttps://www.environmentallawandpolicy.com/2016/10/9th-circuit-upholds-epas-refusal-require-solar-panels-part-bact-analysis-biomass-facility/
Mon, 31 Oct 2016 17:22:18 +0000http://www.environmentallawandpolicy.com/?p=3212Continue Reading…]]>Recently, the Ninth Circuit upheld the Environmental Protection Agency’s (“EPA”) decision to issue an air permit under the Clean Air Act for the construction of a biomass cogeneration facility at a lumber mill, concluding that EPA had acted reasonably when it determined that the applicant should not be required to consider solar power or a greater use of natural gas as part of the Greenhouse Gas Best Available Control Technology (“GHG BACT”) review for the permit.

In Helping Hand Tools v. United States EPA, 2016 U.S. App. LEXIS 16262 (2016), Center for Biological Diversity and other environmental groups brought a claim against an EPA-issued permit under the Prevention of Significant Deterioration (“PSD”) program of the Clean Air Act to permit the construction of a cogeneration facility at a lumber mill. Under PSD, sources are required to install BACT to reduce air emissions. In this case, the owner of a lumber mill proposed as part of its application to use biomass from the mill’s wood byproduct, as well as other readily available sources of agricultural and wood wastes, as the fuel for the cogeneration facility. The petitioners claimed that solar power or mixed natural gas should instead be implemented to reduce GHG emissions as part of the BACT analysis.

The 9th Circuit rejected this claim by holding that, although EPA must consider all available control technologies under BACT, the Agency does not have to consider alternatives that would “redefine the source.” This consideration hinges on the description of the source in the PSD permit application, which articulates the “proposed facility’s end, object, aim or purpose.” The Agency will consider the elements inherent to an applicant’s purpose, and which elements can be changed to reduce pollutant emissions without disrupting the applicant’s basic business purpose. The 9th Circuit reasoned the use of natural gas or solar panels would “redefine the source” by disrupting the business purpose of the cogeneration facility, which here included the utilization of locally-sourced fuel.

The 9th Circuit’s decision in Helping Hand Tools provides an important reaffirmation of the limits of the PSD BACT analysis, and represents the first appellate court application of this principle in the GHG context. A copy of the decision can be found here. For more information or questions regarding the implications of this case or the regulation of GHGs under the Clean Air Act more generally, please contact Randy Brogdon, Margaret Campbell, or Angela Levin.